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CS Professional · Internal and Forensic Audit · Forensic Audit: Laws and Regulations

During a forensic review, a trainee states that the Inter-ministerial Co-ordination Committee under the PMLA is a standing body that came into being automatically when the Act was passed. Which statement correctly corrects him?

The Committee is not automatic. The Central Government may constitute it by notification, under a provision inserted by Act 23 of 2019 with effect from 1 August 2019. Neither the Financial Intelligence Unit, reporting entities nor a Tribunal constitutes it.

  1. AIt is constituted by the Central Government by notification, and the power was inserted w.e.f. 1-8-2019Correct
  2. BIt is constituted by the Financial Intelligence Unit, India through a circular
  3. CIt is elected by the reporting entities every year
  4. DIt is constituted by the Tribunal on application of a regulator

Explanation

Section 72A says the Central Government 'may, by notification, constitute' the Committee, so it is not automatic. The section was inserted by Act 23 of 2019 w.e.f. 1-8-2019. The Financial Intelligence Unit is a participant in the coordination, not the constituting authority.

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